Stambovsky v. Ackley

Case brief summary

Facts

A buyer agreed to purchase a house in Nyack, New York, not knowing the seller had told a national magazine and local newspapers for years that the house was haunted by ghosts.

Procedural history

The trial court threw out the buyer's lawsuit for lack of a valid legal claim. The buyer appealed.

Issue

Can a buyer cancel a house purchase because the seller never mentioned the home's well known haunted reputation, which she herself had spread?

Holding

Yes. Because the seller created and spread the ghost story herself, and no inspection could have revealed it, the buyer can try to cancel the contract and get his deposit back.

Reasoning

The court said buyers normally must discover problems themselves, but this reputation was impossible to find through any normal check and the seller caused it herself by talking to the press, so fairness required letting the buyer out of the deal.

Opinions

Majority (Rubin): The seller created and publicized the haunting, so fairness lets the buyer cancel, even though normal nondisclosure rules would not allow it.

Dissent (Smith): The buyer and seller dealt at arm's length with a lawyer-drafted contract, so mere silence about ghosts should not excuse the buyer from the deal.